Civil and commercial disputes
Mediation can be used in a wide range of civil and commercial disputes that might otherwise end up in court. It is usually - although not always - used where there is a money claim. It can be used for disputes involving businesses, employment, contracts, personal injury and negligence.
See also Community mediation, County Court mediation and Family Mediation.
Further information is given below on:
Advantages and disadvantages
Which disputes are appropriate for mediation?
Cost
Timescale
Procedure
Research
Who provides civil mediation?
Advantages of using civil mediation
- It is voluntary
- It can be faster than going to court
- It allows the parties to retain control of the outcome of their dispute
- It can be less formal and less intimidating than going to court
- It is private and confidential
- It is flexible in terms of the process used
- It is flexible in terms of the possible remedies
Disadvantages of using civil mediation
- It might not result in a resolution
- Because it is voluntary, the other side may not want to mediate
- If you don’t reach an agreement, resolving a dispute can end up taking longer and costing more
- It can be unfair if there is a power imbalance
- The quality of mediation can vary
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Which disputes are appropriate for mediation?
Mediation can be used in a number of disputes that might otherwise end up in court, including:
- building works
- breach of contract
- debt
- personal injury
- clinical and professional negligence
- provision of goods and services
- workplace and employment
Many mediation services offer mediation in a range of these different areas, so it’s worth checking with providers what they will do. Generally speaking:
- Civil and commercial mediation covers disputes which might end up in court
- Family mediation covers disputes which arise when couples separate or divorce
- Community mediation covers disputes between neighbours and other disputes which are unlikely to have a legal solution
It is particularly worth thinking about mediation where there is an ongoing relationship between the two parties to the dispute. This could involve an employee and their employer, a family and their school, a couple and their local builder, or two companies that regularly do business. Mediation is less likely to be effective if the dispute is about a one-off transaction, or reclaiming an unpaid debt. You should also think very carefully about whether mediation is suitable where:
- one party is afraid of the other
- one party is much more experienced or much more confident that the other
- other power imbalances make mediation unsuitable
- one party doesn’t trust the other to keep to an agreement
- one party wants a legal judgement or wants to set a legal precedent
It’s worth remembering that in civil and commercial mediation, unlike family or community mediation, you can take your solicitor or legal adviser along with you to the mediation. This can help remedy an imbalance of power, and give you more confidence when negotiating. However, it will cost more.
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Cost
Civil mediation can be expensive. Organisations providing civil mediation charge from £500 per party per day, or more in particularly high value claims. Fee information is usually available on the provider's website. Don’t forget that your total costs will include the mediator's fee, but also administrative charges such as the cost of the venue, and your own costs, such as solicitor fees. In court, the loser usually pays the costs for both sides. In mediation, parties usually pay their own costs.
If you make an application to the small claims court, you will be offered telephone or face-to-face mediation free through the Small claims mediation scheme which covers England and Wales. The National Mediation Helpline, supported by the government, offers mediation through a number of approved providers with a fixed rate charge. You can see the list of providers and their current charges on the National Mediation Helpline website.
Public funding
In England and Wales reasonable mediation costs, including help in preparing for mediation, the mediator's fee, administrative charges and the parties' costs, can be covered by Legal Aid for eligible clients.
In Scotland and Northern Ireland, the costs of civil mediation are not covered by Legal Aid, although in Scotland legal advice and assistance may be available for legal work in preparing for a mediation.
Other help with costs
Although generally parties divide the mediation fees and charges equally, in some cases, particularly those between an individual and an organisation, the costs of mediation can be paid by the organisation because it has greater financial resources. It is important that the mediator is skilled and experienced enough to ensure that by footing the entire bill, the company does not gain an unfair advantage. Make sure you get some legal advice before agreeing to mediation in cases like these.
LawWorks
The LawWorks mediation service provides free mediation in disputes where one or both of the parties is not eligible for Legal Aid, but is not able to afford a civil mediation provider. LawWorks is run by the solicitors and bar pro-bono unit, and can also provide free legal advice alongside the mediation. There is a profile of this scheme on the LawWorks page of this website.
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Timescale
How long a mediation takes will depend on how complex the dispute is, and how willing the parties are to negotiate. At a minimum, some small claims mediation in court can take 30 minutes. Most mediations for disputes other than small claims will take about two to three hours. At a maximum, it can take a day or more. It is usually best to allow for at least a half day, except for very complicated disputes, where more than a day might be required.
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Procedure
The procedure varies depending on the provider used and the circumstances of the case. The procedure described here is typical but not universal.
For a checklist to help you prepare for mediation, see Tips for mediation.
Referral
Legal advice and representation
Pre-mediation
Who attends?
Agreement to mediate
The mediation session
Strategies
Mediation without a meeting
Withdrawing
Enforcement
Referral
Parties can approach a mediation provider directly or be referred by an adviser or solicitor, or by a county court judge or sheriff.
Legal advice and representation
The role of legal advisers in mediation is an issue often debated by mediators. It is up to the parties to decide whether or not they want legal representation at the actual mediation.
For most civil disputes where legal issues are involved, parties will need some kind of legal advice, at least in deciding whether to proceed with mediation. Deciding whether you need a solicitor with you at the mediation is less clear cut. Many people attend without a lawyer or adviser. One reason for this is that the parties are encouraged to speak for themselves, to describe the situation from their perspective, and to be honest about what they want to achieve. However, if you are inexperienced in negotiating, or if the dispute is between an individual and a large organisation, it is important to have good quality independent advice before you make a decision or sign an agreement.
The mediator will not advise you on whether your agreement is fair or in line with your rights – another good reason to have your own adviser.
Pre-mediation
In some cases both parties will approach the mediator or mediation provider. In others, only one party will. In these cases, you need to decide whether to approach the other party yourself, or whether to ask the mediator to get in touch with an invitation to mediate.
If the other party agrees to mediate, the mediator will arrange a suitable time and place for the mediation session. This can be held at the mediator’s office, or at a convenient neutral venue such as a local hotel. One advantage of mediation is that the face-to-face session can be held at a time and place that is suitable for the parties. This flexibility can reduce the stress and travel costs involved.
Before the mediation, the mediator should be sent a written summary of the situation. The information sent to the mediator beforehand can range from a complete file to simply the parties' names and the issue in dispute, but in general mediators do not want too much information. They will encourage the parties to describe the dispute and the issues they would like to resolve, at the session.
Sometimes the mediator will contact the parties before the mediation.
Who attends?
Parties can attend with their representative, a legal adviser, or a friend or family member. If parties have solicitors attending with them, it is important for both sides to be informed of this beforehand. It is a good idea for there to be some kind of balance between the two sides – either both have an adviser, or neither of them do.
It is very important that the mediation is attended by the people who have the authority to settle a dispute. It is no good engaging in several hours of mediation and then find that an agreement cannot be made on the day because someone else needs to be consulted. This is especially important when one or both sides is a large organisation, where certain decisions can only be made by staff at a certain level.
Agreement to mediate
In most civil mediation the parties will sign an agreement to mediate, either at or before the mediation session. This will include an outline of how mediation works and the role of the mediator. It will also include a commitment to confidentiality and any exceptions. Once this agreement to mediate is signed, the mediation can go ahead.
The mediation session
The parties usually meet face-to-face at a meeting chaired by the mediator, and each gives a brief outline of the dispute from their perspective. This is sometimes the first time that parties have heard the other side's story, and almost certainly the first time they have heard it directly.
The parties then move into separate rooms, and the mediator takes turns speaking with each privately. This gives an opportunity to discuss the issues more frankly and in more detail, without fear of exposing vulnerabilities to the other side. The mediator will encourage the parties to suggest ways to resolve the issues in dispute, and will take these proposals - with the agreement of the parties - from one party to the other.
Strategies
This "shuttle" activity means that you will be left alone for periods of time while the mediator meets with the other side. Having someone with you can help pass the time and also reflect on what has been said. You should also consider what it is you want to achieve from the mediation. If the dispute revolves around a money claim, you will need to determine what your bottom or top line is - the least you are prepared to accept, or the most you are prepared to offer.
Mediation without a meeting
It is also possible to conduct mediation without a meeting. The mediator can talk to both parties over the telephone or by letter or email to help them reach an agreed settlement.
Parties might choose this method if, for example, they want to avoid the time, expense and hassle of travelling to and attending a hearing. But there are disadvantages too – you won’t have a chance to explain your side of the argument to the other person, or to hear what they have to say directly.
Withdrawing
Both parties are free to withdraw from mediation at any point. This might be because a party feels under pressure, or because it looks as though no progress is being made.
If the parties reach agreement, this can be drawn up and signed on the day. It becomes a binding agreement upon signing in the sense that it is a contract that can be enforced in court.
Enforcement
Rules on turning a mediated agreement into a binding order depend on the jurisdiction. Where legal proceedings have been issued in England and Wales, a mediated agreement can be made into a consent order of the court. You should get legal advice before agreeing to this. This is not an option in Scotland or Northern Ireland. If proceedings have not been issued, any signed mediation agreement is a contract like any other contract. If the other party doesn’t keep to their side of the bargain, you can go to court to try to enforce the contract.
However, it’s worth remembering that where both parties have worked together on an agreement, they are more likely to keep to it.
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Research
Information about research into mediation can be found in ADR Research.
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Who provides civil mediation?
There is no single quality assurance standard in civil and commercial mediation, so it can be hard to choose a mediation provider. It may be possible for a friend, a work colleague, or your legal adviser to recommend a mediator. Have a look at Choosing a mediation provider for more information about the options.
You will need to decide what kind of experience you think your mediator should have. It may be useful to have a mediator who is also a solicitor or a barrister, so that they are familiar with the law. But mediators should not give you legal advice – you should make sure you have your own solicitor or legal adviser for that. You might want to ask for a mediator with experience or background knowledge in a particular type of dispute. The organisation providing the mediator should be able to advise you on this.
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June 2009
